Crediting control board oversight and conservative budgeting, the City of Buffalo has received an increase in its credit score from one of Wall Street's rating agencies.
Moody's Investors Service has bumped Buffalo's credit score up from A2 to A1, the highest rating the city has ever received from this agency, according to City Comptroller Mark J.F. Schroeder's office.
The increase, coupled with a revised "stable" outlook, was announced by Moody's and the City Comptroller's Office on Tuesday.
With a better credit score, a municipality's costs for borrowing decrease.
Schroeder, along with City Budget Director Donna J. Estrich and Buffalo Public Schools Chief Financial Officer Barbara J. Smith, went to New York City last month to meet with representatives of each of the "big three" rating agencies.
"Moody's continues to take notice of the progress Buffalo has made, both in improving the city's financial condition, as well as forging a new economy based on health care and education," Schroeder said in a statement.
Moody's notes some challenges that the city still faces, including "uncertainty" involving outstanding union contracts and pending litigation, as well as state aid cuts that "could put significant pressure on the city's finances."
The Buffalo Fiscal Stability Authority, the state-appointed control board, last month began exploring a move to "advisory" status, which would give the city more control of its own finances. Such a move by the board is considered another challenge, Moody's said in issuing the new rating.
"The upgrade to A1 reflects significant improvement of the city's financial operations and liquidity following augmentation of reserves in each of the last eight years," the agency said, "and a trend of structurally balanced operations, despite near-term declines."
Other factors include challenges due to "the city's poor demographic profile" and the board's previous approval of a four-year city financial plan.
Next week, the city plans to borrow $22 million for capital projects, as well as $5 million for schools' capital projects.
In February 2011, Standard & Poor's raised the city's credit score to A from A-.
In May 2010, Fitch Ratings gave Buffalo an A rating, the first time that three major Wall Street agencies put the city in the A tier, then-City Comptroller Andrew A. SanFilippo said.
In a statement, Mayor Byron W. Brown called the upgrade "great news for city taxpayers."
"It's the latest sign of progress in rebuilding Buffalo's economy," he said, "and reflects the city's credit worthiness, strong financial position and ability to repay debt that has a direct savings to taxpayers."